Answer:
Bondware Inc.
FIFO Inventory Method:
Ending Inventory (60 units):
Absorption Costing = $66,000
Variable Costing = $56,400
Explanation:
a) Data and Calculations:
Unit Production Costs for March:
Direct materials $500
Variable overhead 440
Total variable cost $940
Fixed overhead 160
Total manufacturing
costs per unit $1,100
Calculation of Ending Units of Inventory:
Beginning units 100
Units produced = 500
Units sold = (540)
Ending units = 60
Beginning Inventory, 100 units:
Absorption costing value = $90,000
Variable costing value = $76,000
FIFO Inventory Method:
Ending Inventory:
Absorption Costing = 60 * $1,100 = $66,000
Variable Costing = 60 * $940 = $56,400
